Aug 13, 2010
|Carole Rickard Hedden|
The U.S. aerospace and defense industry is anxiously anticipating a wave of retirements that has been looming for years, and wishing that the restless, ambitious group of 20-somethings looking for more exciting opportunities would come up with an “app” to model what the next five years will bring.
If “there’s an app for that” sounds like a foreign phrase, then you probably belong to the demographic the aerospace and defense (A&D) industry has been concerned about losing. Forecasts in the past several years spelled doom, foretelling of a mass exodus of “baby boomer” talent and leadership. But the global recession forced older workers to make very different plans in 2009 and 2010, and the landscape changed unexpectedly. Or rather, it stayed the same.
The 2010 Aviation Week Workforce Study found that approximately 33% of those eligible for retirement cited upside down 401(K) investments as the reason for putting off their exits. Between last year and 2010, the retirement rate dropped from 5.7% to 2% of eligible baby boomers.
So when are the aging workers leaving? Close to 30% of the A&D workforce are 50-59-years old. And with recent talk of raising the full retirement age to 70, people could stay in their jobs even longer. Or workers may bolt for the door before legislation extending retirement age takes effect.
In the larger companies surveyed (those with more than 100,000 employees), Aviation Week found that the rate of eligibility (age 65 in our study) by the end of 2009 was 19% of the workforce. That number grows to more than 30% in 2012 and reaches nearly 40% by 2014. Smaller companies, those with fewer than 50,000 employees, are anticipating 16% of the workforce will become eligible to retire at the end of 2009. By 2014, that number reaches 34%. Companies with fewer than 10,000 employees are looking at potentially 20% of their workforce retiring.
The ripple effect of this exodus is forcing companies to become creative, offering retirement programs that ease the transition for its workers or providing transition plans that allow the baby boomers to stay on the job longer but with a more flexible work schedule. Lockheed Martin, for example, is offering a voluntary executive separation program targeting director and vice president-level employees. Gina Burns, vice president of workforce strategy, says the offer will better align the leader-to-employee ratio. Burns says employees are indicating they want or need to work longer. “We are hiring a lot of folks in the mid-career range,” a move many companies are taking to address the shortage of 45-49-year-olds in the industry.
At the other end of the spectrum is a large group of talented, enthusiastic and diverse young workers. When the advisory board of Aviation Week’s first Young Professional/University Student study met with corporate CEOs in mid-July to review the results of the studies, the differences were revealing. Surprisingly, the generation gap is strongest not between baby boomers and 20-somethings, but between those in their 20s and the group a decade their senior, often referred to as Generation X.
One of the biggest challenges today’s aerospace and defense companies face is leading employees fresh out of the classroom, a group that calculated their grade point averages between classes and is accustomed to frequent and positive feedback. New graduates want career road maps and options, a clear path to promotion and validation of their efforts.
The 30-something group is quite different. Employees in this cohort tend not to need the same level of feedback to remain confident. But these employees are also fighting to get ahead despite a legacy of being looked at as slackers, at least by popular culture. So the challenge may be teaching the “slackers” to manage the generation that follows them.
Another finding in the study is that when today’s young talent goes job-hunting, they are looking for more than just a good salary. They want a strong benefits package, challenging work and opportunities for advancement. These data are similar to those of previous generations. What is surprising, in an era when we have been told young people are highly mobile, is that 57% believe they will stay with their first employer for three to seven years.